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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Fbd Holdings Plc | LSE:FBH | London | Ordinary Share | IE0003290289 | ORD EUR0.60 (CDI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 13.75 | 13.20 | 14.30 | 13.75 | 13.75 | 13.75 | 1,006 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Insurance Carriers, Nec | 123.4M | 69.54M | 1.9839 | 10.03 | 697.54M |
From Apr 2019 to Apr 2024
TIDMFBH
RNS Number : 1970R
FBD Holdings PLC
27 February 2019
FBD HOLDINGS PLC
27 February 2019
FBD HOLDINGS PLC
PRELIMINARY ANNOUNCEMENT
For the year ended 31 December 2018
KEY HIGHLIGHTS
-- EUR50m profit before tax -- Proposed 2018 dividend of 50c per share -- Full Year Return on Equity of 15%
-- Combined Operating Ratio ("COR") of 81% includes positive prior year reserve development of EUR29m and includes Storm Emma costs of net EUR6.6m
-- Purchase and cancellation of the EUR70m Fairfax convertible bond at a cost of EUR86m was funded through the issue of non-convertible debt of EUR50m and cash reserves
-- Excellent financial results demonstrate continued underwriting discipline:
o Gross Written Premium down by EUR1m to EUR372m in a highly competitive environment
o New business count growth of 11% in 2018
o An Post Insurance partnership is successfully underway
o A primary Team Ireland sponsor for the Tokyo 2020 Olympic games
o Digital enhancement of FBD Insurance and Group websites
o Increased urban presence with new branch opening in Baggot St, Dublin 2, relocations in Cork and Limerick
Hot Features
Premium
2018 2017
FINANCIAL SUMMARY EUR000s EUR000s
Gross written premium 371,504 372,459
Underwriting profit 63,418 44,935
Profit before taxation 50,065 49,736
Loss ratio 56.3% 62.9%
Expense ratio 24.9% 23.3%
Combined operating ratio 81.2% 86.2%
Cent Cent
Basic profit per share 122 123
Net assets per share 818 784
-- Gross Written Premium of EUR371.5m (2017: EUR372.5m). New business levels are strong despite the competitive challenges.
-- Net profit before tax of EUR50m, in line with EUR49.7m in 2017
-- COR of 81.2%, improved from 86.2% in 2017, and includes a EUR28.7m (8.5%) benefit from prior year reserve release and Storm Emma net costs after reinsurance recoveries of EUR6.6m
-- Annualised total investment return of -0.5% (2017: 1.2%), which is disappointing in challenged markets
-- Solvency Capital Ratio of 164% (unaudited) after allowing for 2018 proposed dividend of EUR17.6m
Commenting on these results Fiona Muldoon, Group Chief Executive, said:
"Our continued focus on underwriting discipline has delivered excellent underwriting profits for 2018. I am delighted the Board has proposed to more than double the dividend to 50c per share on the back of such strong results, rewarding our loyal shareholders.
The successful purchase and cancellation of the Fairfax convertible bond in October demonstrated the financial strength of FBD.
2018 is a great team result and we intend to continue to deliver on our strategy in the coming years. From fifty years in business we know that having the right insurance cover at the right price is in the long-term best interests of our customers. We will continue to maintain underwriting discipline in order to provide stability in our core market. FBD continues to offer the broadest cover available to farm customers for property damage and to mitigate the financial impact of tragic farm accidents which are still all too frequent.
In 2019 we are focused on our growth plans as a strong, independent Irish business. While the impact of any Brexit is unwelcome to FBD and to our customers, we are resilient and we will navigate this together with Irish farming and with all other Irish businesses."
A presentation will be made to analysts at 10.00am today, a copy of which will be available on our Group website www.fbdgroup.com.
Enquiries Telephone FBD Michael Sharpe, Investor Relations +353 1 409 3962 Powerscourt Jack Hickey +353 83 448 8339
About FBD Holdings plc ("FBD")
FBD is one of Ireland's largest property and casualty insurers, looking after the insurance needs of farmers, consumers and business owners. Established in the 1960s by farmers for farmers, FBD has built on those roots in agriculture to become a leading general insurer serving the needs of its direct agricultural, small business and consumer customers throughout Ireland. It has a network of 34 branches nationwide.
Forward Looking Statements
Some statements in this announcement are forward-looking. They represent expectations for the Group's business, and involve risks and uncertainties. These forward-looking statements are based on current expectations and projections about future events. The Group believes that current expectations and assumptions with respect to these forward-looking statements are reasonable. However, because they involve known and unknown risks, uncertainties and other factors, which are in some cases beyond the Group's control, actual results or performance may differ materially from those expressed or implied by such forward-looking statements.
The following details relate to FBD's ordinary shares of EUR0.60 each which are publicly traded:
Listing Euronext Dublin UK Listing Authority Listing Category Premium Premium (Equity) Trading Venue Euronext Dublin London Stock Exchange Market Main Securities Market Main Market ISIN IE0003290289 IE0003290289 Ticker FBD.I or EG7.IR FBH.L
OVERVIEW
In FBD's 50(th) year of business the Group delivered a profit of EUR50.0m (2017: EUR49.7m) and a return on equity of 15%. This is an excellent performance underpinned by continued underwriting discipline and supported by positive prior year reserve development.
In October, FBD successfully purchased the Fairfax convertible bond for EUR86m and subsequently issued non-convertible debt of EUR50m at a lower coupon rate of 5%. This is a strong result for the business demonstrating investor confidence in FBD's stability and future.
The Board has proposed a dividend of 50c per share (2017: 24c) in respect of the 2018 financial year. The underwriting profit has increased to EUR63.4m (2017: EUR44.9m) and includes Storm Emma net costs of EUR6.6m after reinsurance recoveries.
UNDERWRITING
Premium income
Strong competition in all customer segments has resulted in a decrease in gross written premium of EUR1m to EUR371.5m (2017: EUR372.5m). Increases in Commercial business were offset by reductions in Agri and Consumer as we maintained our underwriting discipline in the face of strong competition. The underlying loss performance of the book is improving with minimal rate increases carried across the book. New business volumes grew by 11% primarily in personal lines. Retention rates generally held up across the book with the aid of sustained efforts and customer initiatives.
Reinsurance
The 2018 reinsurance programme provided strong protection to the business. Storm Emma was the only extreme weather event in 2018, with a net cost after reinsurance recoveries of EUR6.6m. There was limited additional exposure to weather events in the second half of the year.
Claims
Net claims incurred amounted to EUR183.4m (2017: EUR203.1m). There was positive prior year reserve releases of EUR26.9m, mainly from the 2015 to 2017 accident years, which showed sustained improvements relative to previous expectations. There was a further release from prior year reserves of EUR1.8m as the timing of the introduction of the 2% Motor Insurance Insolvency Compensation Fund (MIICF) levy on insurers was delayed.
The Group incurred a net charge of EUR7.1m (2017: EUR1.9m) relating to its MIBI levy and related obligation, which is calculated based on the Group's expected share of the motor market for 2018. The 2017 charge includes the MIBI levy reserve release of EUR5.6m for the "Setanta" case.
Claims Environment
More moderate inflation is evident across the claims environment though the cost of claims continues to remain high. The level of increases in the average cost of smaller injury claims has slowed, though we have also observed a significant increase in the average cost of motor damage and property claims over the course of the year.
We continue to await the enactment by the Government of the PIAB (Amendment) Bill to tackle the non-co-operation of claimants and their legal representatives with the Injuries Board. This legislation is necessary to reduce the rate at which claimants are rejecting compensation offers by the Injuries Board and to ultimately lower the cost of claims. The Judicial Council is expected to rewrite the Book of Quantum although no bill has yet been drafted. Overall, we are very disappointed with the pace of reform, given that the key recommendations of the Cost of Insurance Working Group were published two years ago.
We are hopeful claims awards will reduce following the Court of Appeal case "Byrne v Ardenhealth Company Ltd" where a unanimous judgement confirmed that the occupier had not breached their statutory duty to take reasonable care and can assume visitors will take reasonable care of their own safety, overturning the earlier High Court damages award.
We continue to vigorously contest suspect claims. We welcome the amendment to the Civil Liability and Courts Act where a judge can dismiss a claim if a claimant gives false evidence having provided a sworn affidavit. This change may act as a deterrent for dishonest or false claims.
The Personal Injuries Commission report published in September 2018 highlighted inconsistencies between Irish and international awards that must be tackled if we are to reduce insurance costs for Irish businesses, farmers and consumers alike.
Weather, Claims Frequency and Large Claims
In March 2018 Storm Emma was a combination of snow and strong winds which created blizzard-like conditions impacting the whole of Ireland, particularly the south of the country. FBD received over 1,200 claims costing EUR6.6m net of reinsurance and reinstatement premia.
Stabilisation in motor injury frequency continued following reductions in 2016 and 2017.
The projected gross cost of large injury claims (greater than EUR0.5m) in 2018 is approximately in line with the five year average. While there has been a significant decrease in the number of personal motor large injury claims this year, this has been replaced by a significant increase in the number of employers liability claims, in particular large farm claims. We have also observed an improvement in the development of large claims from 2016 and 2017 relative to previous expectations.
Expenses
The Group's expense ratio was 24.9% (2017: 23.3%). Other underwriting expenses were EUR84.1m, an increase of EUR8.1m. EUR4.6m of the increase relates to changes in the reinsurance arrangements and the balance reflects additional IT spend in respect of work for the introduction of GDPR, wage inflation and increased regulatory costs.
General
FBD's Combined Operating Ratio ("COR") was 81.2% generating an underwriting profit of EUR63.4m (2017: EUR44.9m).
Investment Return
FBD's total investment return for 2018 was -0.5% (2017: 1.2%). 0.2% (2017: 0.9%) is recognised in the Consolidated Income Statement and -0.7% (2017: 0.3%) recognised in the Consolidated Statement of Other Comprehensive Income (OCI). The returns are a reflection of the challenging investment conditions experienced during 2018 especially Q4. The negative returns in OCI were driven by credit spread widening on the corporate bond portfolio and spread widening on some Eurozone sovereign bonds, particularly Italy.
Financial Services
The Group's financial services operations delivered a profit before tax of EUR2.5m for the year (2017; EUR4.5m). The life, pension and investment broking operation (FBD Financial Solutions) increased revenue by 23% to EUR3.8m (2017: EUR3.1m) with modest cost increases to support the increased activity. Other financial services fees decreased marginally. Holding company costs increased from EUR1.4m to EUR3.5m primarily due to significant legal expenses during 2018 and higher allocated salary costs than prior year.
Profit per share
The diluted profit per share was 112 cent per ordinary share, compared to 111 cent per ordinary share in 2017.
Dividend
The Board is focused on the long-term interest of all stakeholders and maintains a robust capital position including strong solvency and liquidity margins. Given the strong financial performance of FBD in 2018 the Board proposes to pay a dividend of 50c per share for the 2018 financial year (2017: 24 cent). This is equivalent to a pay-out ratio of approximately 40% in respect of 2018 profits. The Group continues to target an annual 20% to 50% pay-out range of full year profits when appropriate, recognising that extreme weather events and inherent cyclicality are a feature of all insurance businesses.
Subject to the approval of shareholders at the Annual General Meeting to be held on 10 May 2019, the final dividend for 2018 will be paid on 17 May 2019 to the holders of shares on the register on 12 April 2019. The dividend is subject to withholding tax ("DWT") except for shareholders who are exempt from DWT and who have furnished a properly completed declaration of exemption to the Company's Registrar from whom further details may be obtained.
STATEMENT OF FINANCIAL POSITION
Capital position
Ordinary shareholders' funds at 31 December 2018 amounted to EUR283.5m (2017: EUR271.6m). The increase in shareholders' funds is mainly attributable to the following:
-- Profit after tax for the year of EUR42.4m: Offset by -- EUR8.6m dividend payments in respect of the 2017 financial year -- Cancellation of the Fairfax bond of EUR21.0m
-- Mark to market losses on Available for Sale investments of EUR6.8m after tax recognised in the statement of other comprehensive income
-- Share based payments of EUR0.7m
-- The increase in the defined benefit pension scheme surplus of EUR2.8m after tax following a 5bps increase in the discount rate to 1.8% and drop in long-term inflation to 1.5%.
-- IFRS 15 transitional adjustment of EUR2.4m.
Net assets per ordinary share are 818 cent, compared to 784 cent per share at 31 December 2017.
Investment Allocation
The Group adopts a conservative investment policy where it ensures that its technical reserves are well matched by cash and fixed interest securities of similar nature and duration. FBD has increased its allocation to Government bonds and risk assets during the year in line with the company's current Strategic Asset Allocation framework. There has been a corresponding reduction in deposits and cash of EUR36.1m as a result of the cancellation and repayment of the Fairfax convertible bond.
The allocation of the Group's underwriting investment assets is as follows:
31 December 2018 31 December 2017
EURm % EURm %
Corporate bonds 498 48% 499 47%
Government bonds 297 29% 259 25%
Deposits and cash 146 14% 230 22%
Equities 24 2% 22 2%
Investment property 18 2% 18 2%
Other risk assets 55 5% 24 2%
---------- -------- ---------- --------
1,038 100% 1,052 100%
---------- -------- ---------- --------
Solvency
The latest (unaudited) Solvency Capital Ratio (SCR) is 164% which is in line with the 2017 SCR of 164%, after the partial use of own funds to pay for the Fairfax Convertible Bond transaction and includes the foreseeable dividend of EUR17.6m.
OUTLOOK
In 2018 FBD delivered a return on equity of 15% and a Current Year COR of 90%, through strong underwriting discipline and full price adequacy. This result includes Storm Emma net costs of EUR6.6m. In addition, the 2018 result also includes positive prior year reserve development of EUR26.9m and a MIBI levy reserve release of EUR1.8m.
The injury claims environment is showing signs of moderation although inflation is still present, particularly in motor damage and property claims. Injury costs remain stubbornly high, even if they are no longer increasing as substantially as in previous years. We also see continued inflation in legal costs. We urgently need an injection of pace from policymakers in the delivery of the recommendations from the Cost of Insurance Working Group in order to deliver reform and reduce insurance costs for our customers.
Storm Emma demonstrated again the quality of our farm cover and our claims processes. We delivered for our customers when we were needed. The increase in farm related employer's liability and tractor claims continues to emphasise the urgent need for better farm safety. FBD continues to invest significantly in this area. We understand the impact these accidents have on farmers and their families both financially and personally. FBD will continue to support farm safety organisations in education to change on-farm behaviour and help mitigate the personal impact of such tragic accidents.
Uncertainty still exists around Brexit and the likely impact is both unwelcome and hard to quantify for Irish farmers and businesses. Competition from other insurers is currently intense. FBD has been in Ireland for fifty years supporting our farm customers and we will maintain strong underwriting discipline in the face of both aggressive competition and economic uncertainty in order to deliver stability for our customers. FBD is focused on growing its urban presence in a measured fashion while continuing to maintain its large market share in rural Ireland through the delivery of outstanding products and outstanding customer service.
The Group expects to deliver a COR in the low 90s (absent exceptional weather) and is targeting a low double-digit return on equity ("ROE") through the cycle.
FBD Holdings plc
Consolidated Income Statement
For the financial year ended 31 December 2018
Continuing Operations 2018 2017
EUR000s EUR000s
Revenue 396,003 397,741
---------- ----------
Income
Gross premium written 371,504 372,459
Reinsurance premiums (36,735) (27,267)
---------- ----------
Net premium written 334,769 345,192
Change in provision for unearned premiums 3,134 (19,260)
---------- ----------
Net premium earned 337,903 325,932
Net investment return 2,482 9,361
Financial services income - Revenue from
contracts with customers 3,754 3,059
- Other financial services income 5,282 5,674
---------- ----------
Total income 349,421 344,026
Expenses
Net claims and benefits (183,367) (203,144)
Other underwriting expenses (84,054) (75,908)
Movement in other provisions (7,064) (1,945)
Financial services and other costs (6,548) (4,200)
Revaluation of property, plant and equipment (1,034) (1,080)
Restructuring and other costs - (1,715)
Finance costs (5,453) (6,298)
Exceptional loss on purchase and cancellation (11,836) -
of convertible debt
Profit before taxation 50,065 49,736
Income taxation charge (7,682) (7,040)
---------- ----------
Profit for the financial year 42,383 42,696
---------- ----------
Attributable to:
Equity holders of the parent 42,383 42,696
FBD Holdings plc
Consolidated Income Statement
For the financial year ended 31 December 2018
Earnings per share
From continuing operations 2018 2017
Cent Cent
Basic 122 123
------- -------
Diluted 112(1) 111(2)
------- -------
(1) Diluted earnings per share reflects the potential conversion of convertible debt up until the date of repurchase and cancellation of the convertible debt and the potential vesting of share based payments.
(2) Diluted earnings per share reflected the potential conversion of convertible debt and the potential vesting of share based payments.
The accompanying notes form an integral part of the Financial Statements.
The Financial Statements were approved by the Board and authorised for issue on 26 February 2019.
FBD Holdings plc
Consolidated Statement of Comprehensive Income
For the financial year ended 31 December 2018
2018 2017
EUR000s EUR000s
Profit for the financial year 42,383 42,696
---------- ---------
Items that will or may be reclassified
to profit or loss in subsequent periods:
Net (loss)/gain on available for
sale financial assets during the
year (7,845) 2,807
Taxation credit/(charge) relating
to items that will or may be reclassified
to profit or loss in subsequent periods 981 (351)
Items that will not be reclassified
to profit or loss in subsequent periods:
Actuarial gain on retirement benefit
obligations 3,232 275
Taxation charge relating to items
not to be reclassified in subsequent
periods (404) (34)
---------- ---------
Other comprehensive (expense)/ income
after taxation (4,036) 2,697
---------- ---------
Total comprehensive income for the
financial year 38,347 45,393
---------- ---------
Attributable to:
Equity holders of the parent 38,347 45,393
FBD Holdings plc
Consolidated Statement of Financial Position
At 31 December 2018
ASSETS
2018 2017
EUR000s EUR000s
Property, plant and equipment 68,492 68,251
Intangible assets 355 -
Investment property 18,310 18,000
Loans 615 681
Deferred taxation asset 1,081 5,467
Financial assets
Available for sale investments 795,717 758,687
Investments held for trading 78,778 45,347
Deposits with banks 70,998 195,985
---------- ----------
945,493 1,000,019
---------- ----------
Reinsurance assets
Provision for unearned premiums 6 4
Claims outstanding 80,919 90,561
---------- ----------
80,925 90,565
---------- ----------
Retirement benefit asset 12,944 9,774
Current taxation asset 3,949 3,934
Deferred acquisition costs 31,956 31,366
Other receivables 62,868 64,020
Cash and cash equivalents 77,639 27,176
---------- ----------
Total assets 1,304,627 1,319,253
---------- ----------
FBD Holdings plc
Consolidated Statement of Financial Position (continued)
At 31 December 2018
EQUITY AND LIABILITIES 2018 2017
EUR000s EUR000s
Equity
Called up share capital presented
as equity 21,409 21,409
Capital reserves 20,430 19,726
Retained earnings 241,645 212,259
Other reserves - 18,232
---------- ----------
Equity attributable to ordinary
equity holders of the parent 283,484 271,626
Preference share capital 2,923 2,923
Total equity 286,407 274,549
Liabilities
Insurance contract liabilities
Provision for unearned premiums 182,875 186,008
Claims outstanding 738,025 765,012
---------- ----------
920,900 951,020
Other provisions 7,738 6,647
Convertible debt - 52,525
Subordinated debt 49,426 -
Deferred taxation liability 3,610 3,845
Current taxation liability 3,312 -
Payables 33,234 30,667
Total liabilities 1,018,220 1,044,704
---------- ----------
Total equity and liabilities 1,304,627 1,319,253
---------- ----------
The accompanying notes form an integral part of the Financial Statements.
FBD Holdings plc
Consolidated Statement of Cash Flows
For the financial year ended 31 December 2018
2018 2017
EUR000s EUR000s
Cash flows from operating activities
Profit before taxation 50,065 49,736
Adjustments for:
Loss / (profit) of investments held for trading 4,411 (1,685)
Exceptional loss on purchase and cancellation of convertible bond 11,836 -
Loss on investments available for sale 4,825 5,981
Interest and dividend income (12,072) (12,735)
Depreciation/amortisation of property, plant and equipment and intangible assets 11,682 11,426
Share-based payment expense 704 685
Revaluation of investment property (310) (1,600)
Revaluation of property, plant and equipment 1,034 1,080
(Decrease)/increase in insurance contract liabilities (20,480) 17,486
Increase/(decrease) in other provisions 1,091 (4,600)
Operating cash flows before movement in working capital 52,786 65,774
Decrease/(increase) in receivables and deferred acquisition costs 3,390 (8,094)
Increase/(decrease) in payables 7,883 (13,084)
Interest payments on convertible debt (5,130) (4,900)
Purchase of investments held for trading (82,916) (958)
Sale of investments held for trading 45,075 47,597
Cash generated from operations 21,088 86,335
Interest and dividend income received 11,992 13,218
Income taxes refunded - 228
---------- ----------
Net cash generated from operating activities 33,080 99,781
---------- ----------
Cash flows from investing activities
Purchase of available for sale investments (138,798) (258,355)
Sale of available for sale investments 89,101 125,989
Purchase of property, plant and equipment (13,003) (7,869)
Sale of property, plant and equipment 90 106
Purchase of intangible assets (399) -
Decrease in loans and advances 66 51
Decrease in deposits invested with banks 124,987 40,912
Net cash generated from / (used in) investing activities 62,044 (99,166)
---------- ----------
Cash flows from financing activities
Ordinary and preference dividends paid (8,602) -
Purchase and cancellation of convertible debt (86,059) -
Proceeds from issue of subordinate debt 50,000 -
Net cash used in financing activities (44,661) -
---------- ----------
Net increase in cash and cash equivalents 50,463 615
Cash and cash equivalents at the beginning of the year 27,176 26,561
Cash and cash equivalents at the end of the financial year 77,639 27,176
---------- ----------
The accompanying notes form an integral part of the Financial Statements.
FBD Holdings plc
Consolidated Statement of Changes in Equity
For the financial year ended 31 December 2018
Called up Capital Retained Other Attributable Preference Total equity
share reserves earnings reserves to ordinary share
capital shareholders capital
presented
as equity
EUR000s EUR000s EUR000s EUR000s EUR000s EUR000s EUR000s
Balance at 1
January 2017 21,409 19,041 166,866 18,232 225,548 2,923 228,471
Profit after
taxation - - 42,696 - 42,696 - 42,696
Other
comprehensive
expense - - 2,697 - 2,697 - 2,697
------------ ------------- ------------ ------------- ------------- ------------ -------------
21,409 19,041 212,259 18,232 270,941 2,923 273,864
Recognition of
share based
payments - 685 - - 685 - 685
Balance at 31
December 2017 21,409 19,726 212,259 18,232 271,626 2,923 274,549
------------ ------------- ------------ ------------- ------------- ------------ -------------
Transitional
adjustment
IFRS 15 - - 2,404 - 2,404 - 2,404
Profit after
taxation - - 42,383 - 42,383 - 42,383
Other
comprehensive
income - - (4,036) - (4,036) - (4,036)
------------ ------------- ------------ ------------- ------------- ------------ -------------
21,409 19,726 253,010 18,232 312,377 2,923 315,300
Dividends paid
and approved
on ordinary
and preference
shares - - (8,602) - (8,602) - (8,602)
Recognition of
share based
payments - 704 - - 704 - 704
Repurchase and
cancellation
of convertible
debt - - (2,763) (18,232) (20,995) - (20,995)
Balance at 31
December 2018 21,409 20,430 241,645 - 283,484 2,923 286,407
------------ ------------- ------------ ------------- ------------- ------------ -------------
FBD Holdings plc
Supplementary Information
For the year ended 31 December 2018
Note 1 Underwriting PROFIT
2018 2017
EUR000s EUR000s
Gross premium written 371,504 372,459
---------- ----------
Net premium earned 337,903 325,932
Net claims incurred (183,367) (203,144)
Other provisions (7,064) (1,945)
Net underwriting expenses (84,054) (75,908)
---------- ----------
Underwriting Profit 63,418 44,935
---------- ----------
2018 2017
Net underwriting expenses EUR000s EUR000s
Management expenses 84,220 81,751
Deferred acquisition costs (590) (6,363)
--------- ---------
Gross underwriting expenses 83,630 75,388
Reinsurance commissions receivable (2,876) (2,528)
Broker commission payable 3,300 3,048
--------- ---------
Net underwriting expenses 84,054 75,908
--------- ---------
FBD Holdings plc
Supplementary Information (continued)
For the year ended 31 December 2018
Note 2 EARNINGS PER EUR0.60 ORDINARY SHARE
The calculation of the basic and diluted earnings per share attributable to the ordinary shareholders is based on the following data:
2018 2017
Earnings EUR000s EUR000s
Profit for the year for the purpose of
basic earnings per share 42,383 42,696
Profit for the year for the purpose of
diluted earnings per share 46,639 48,207
------------- -------------
Number of shares 2018 2017
No. No.
Weighted average number of ordinary shares
for the purpose of basic earnings per
share (excludes treasury shares) 34,666,201 34,666,201
Weighted average number of ordinary shares
for the purpose of diluted earnings per
share (excludes treasury shares) 41,507,329 43,329,630
Cent Cent
Basic earnings per share 122 123
------------- -------------
Diluted earnings per share 112(1) 111(2)
------------- -------------
(1) Diluted earnings per share reflects the potential conversion of convertible debt up until the date of repurchase and cancellation of the convertible debt and the potential vesting of share based payments.
(2) Diluted earnings per share reflected the potential conversion of convertible debt and the potential vesting of share based payments.
The 'A' ordinary shares of EUR0.01 each that are in issue have no impact on the earnings per share calculation.
FBD Holdings plc
Supplementary Information (continued)
For the year ended 31 December 2018
Note 3 DIVIDS
2018 2017
EUR000s EUR000s
Paid during year:
2017 dividend of 8.4 cent (2016: nil cent)
per share on 14% non-cumulative preference 113 -
shares of EUR0.60 each
2017 dividend of 4.8 cent (2016: nil cent)
per share on 8% non-cumulative preference shares 169 -
of EUR0.60 each
2017 final dividend of 24.0 cent (2016: nil
cent) per share on ordinary shares of EUR0.60 8,320 -
each
--------- --------
Total dividends paid 8,602 -
--------- --------
2018 2017
EUR000s EUR000s
Proposed:
2018 dividend of 8.4 cent (2017: 8.4 cent)
per share on 14% non-cumulative preference
shares of EUR0.60 each 113 113
2018 dividend of 4.8 cent (2017: 4.8 cent)
per share on 8% non-cumulative preference shares
of EUR0.60 each 169 169
2018 final dividend of 50 cent (2017: 24.0
cent) per share on ordinary shares of EUR0.60
each 17,333 8,320
--------- --------
Total dividends proposed 17,615 8,602
--------- --------
The proposed dividend is subject to approval by shareholders at the Annual General Meeting on 10 May 2019 and has not been included as a liability in the Consolidated Statement of Financial Position.
FBD Holdings plc
Supplementary Information (continued)
For the year ended 31 December 2018
Note 4 CALLED UP SHARE CAPITAL PRESENTED AS EQUITY
Number 2018 2017
EUR000s EUR000s
(i) Ordinary shares of EUR0.60
each
Authorised:
At the beginning and the end
of the year 51,326,000 30,796 30,796
------------ -------- --------
Issued and fully paid:
At the beginning and the end
of the year 35,461,206 21,277 21,277
------------ -------- --------
(ii) 'A' Ordinary shares of EUR0.01
each
Authorised:
At the beginning and the end
of the year 120,000,000 1,200 1,200
------------ -------- --------
Issued and fully paid:
At the beginning and the end
of the year 13,169,428 132 132
------------ -------- --------
Total - issued and fully paid 21,409 21,409
-------- --------
The 'A' ordinary shares of EUR0.01 each are non-voting. They are non-transferable except only to the Company. Other than a right to a return of paid up capital of EUR0.01 per 'A' ordinary share in the event of a winding up, the 'A' ordinary shares have no right to participate in the capital or the profits of the Company.
The holders of the two classes of non-cumulative preference shares rank ahead of the two classes of ordinary shares in the event of a winding up. Before any dividend can be declared on the ordinary shares of EUR0.60 each, the dividend on the non-cumulative preference shares must firstly be declared or paid.
The number of ordinary shares of EUR0.60 each held as treasury shares at the beginning (and the maximum number held during the year) was 795,005 (2017: 795,005). The number of ordinary shares of EUR0.60 each held as treasury shares at the end of the year was 795,005 (2017: 795,005). This represented 2.2% (2017: 2.2%) of the shares of this class in issue and had a nominal value of EUR477,003 (2017: EUR477,003). There were no ordinary shares of EUR0.60 each purchased by the Company during the year.
The weighted average number of ordinary shares of EUR0.60 each in the earnings per share calculation has been reduced by the number of such shares held in treasury.
All issued shares have been fully paid.
Note 5 TRANSACTIONS WITH RELATED PARTIES
Farmer Business Developments plc and FBD Trust Company Ltd have a substantial shareholding in the Group at 31 December 2018. Details of their shareholdings and related party transactions are set out in the Annual Report.
As part of the subordinated debt investment, Farmer Business Developments invested EUR20.0m and FBD Trust Ltd invested EUR13.0m.
FBD Holdings plc
Supplementary Information (continued)
For the year ended 31 December 2018
For the purposes of the disclosure requirements of IAS 24, the term "key management personnel" (i.e. those persons having authority and responsibility for planning, directing and controlling the activities of the Group) comprises the Board of Directors and Company Secretary of FBD Holdings plc and the Group's primary subsidiary, FBD Insurance plc and the members of the Executive Management Team.
The remuneration of key management personnel ("KMP") during the year was as follows:
2018 2017
EUR000s EUR000s
Short term employee benefits(1) 3,545 3,590
Post-employment benefits 297 269
Share based payments 316 440
-------- --------
Charge to the Consolidated Income Statement 4,158 4,299
-------- --------
(1) Short term benefits include fees to non-executive Directors, salaries and other short-term benefits to all Key Management Personnel.
Full disclosure in relation to the 2018 and 2017 compensation entitlements and share awards of the Board of Directors is provided in the Annual Report.
In common with all shareholders, Directors received payments/distributions related to their holdings of shares in the Company during the year, amounting in total to EUR3,571 (2017: EURnil).
Note 6 CHANGE IN ACCOUNTING POLICY
IFRS 15 Revenue from Contracts with Customers was effective from 1 January 2018 and was adopted by the Group on that date. The Group has applied the modified retrospective approach to the standard. At the date of initial adoption, the following adjustment was made on 1 January 2018:
-- Increase in "Other Receivables" EUR2.7m -- Increase in "Deferred Tax Liability" EUR0.3m -- Increase in "Retained Earnings" EUR2.4m
Full disclosure on the impact of IFRS 15 is provided in the Annual Report.
Note 7 Alternative performance measures (APM's)
The Group uses the following alternative performance measures: Loss ratio, expense ratio, combined operating ratio, annualised investment return, net asset value per share, return on equity and gross written premium.
Loss ratio (LR), expense ratio (ER) and combined operating ratio (COR) are widely used as a performance measure by insurers, and give users of the financial statements an understanding of the underwriting performance of the entity. Investment return is used widely as a performance measure to give users of financial statements an understanding of the performance of an entities investment portfolio. Net asset value per share (NAV) is a widely used performance measure which provides the users of the financial statements the book value per share. Return on equity (ROE) is also a widely used profitability ratio that measures an entity's ability to generate profits from its
FBD Holdings plc
Supplementary Information (continued)
For the year ended 31 December 2018
shareholder investments. Gross written premium refers to the revenue of an insurance company and is widely used across the general insurance industry.
The calculation of the APM's is based on the following data:
2018 2017
EUR000s EUR000s
Loss ratio
Net claims and benefits 183,367 203,144
Movement in other provisions 7,064 1,945
----------
Total claims incurred 190,431 205,089
Net premium earned 337,903 325,932
----------
Loss ratio (Total claims/Net premium earned) 56.3% 62.9%
---------- ----------
Expense ratio
Other underwriting expenses 84,054 75,908
Net premium earned 337,903 325,932
---------- ----------
Expense ratio (Underwriting expenses/Net
premium earned) 24.9% 23.3%
---------- ----------
Combined operating ratio % %
Loss ratio 56.3% 62.9%
Expense ratio 24.9% 23.3%
---------- ----------
Combined operating ratio (Loss ratio +
Expense ratio) 81.2% 86.2%
---------- ----------
2018 2017
Investment return EUR'000s EUR'000s
Investment return recognised in Consolidated
Income Statement 2,482 9,361
Investment return recognised in Consolidated
Statement of Comprehensive Income (7,845) 2,807
------------ -----------
Total investment return (5,363) 12,168
Average underwriting investment assets 1,047,711 1,027,637
------------ -----------
Investment return % (Total investment return/Average
underwriting investment assets) -0.5% 1.2%
------------ -----------
FBD Holdings plc
Supplementary Information (continued)
For the year ended 31 December 2018
2018 2017
Net asset value per share EUR'000s EUR'000s
Equity attributable to ordinary equity
holders of the parent 283,483 271,626
----------- -----------
Number of shares
Number of ordinary shares in issue (excluding
treasury) 34,666,201 34,666,201
----------- -----------
Cent Cent
Net asset value per share (NAV) (Shareholders
funds / Closing number of ordinary shares) 818 784
----------- -----------
Return on Equity
Weighted average equity attributable to
ordinary equity holders of the parent 277,555 248,587
Result for the period 42,383 42,696
Return on equity (Result for the period/Weighted
average equity attributable to ordinary
equity holders of the parent) 15% 17%
----------- -----------------
Gross premium written: The total premium on insurance underwritten
by an insurer or reinsurer during a specified period, before
deduction of reinsurance premium.
Note 8 Subsequent Events
There have been no subsequent events that would have a material impact on the Financial Statements.
Note 9 General Information and Accounting Policies
The financial information set out in this document does not constitute full statutory Financial Statements for the years ended 31 December 2018 or 2017 but is derived from same. The Group Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union, applicable Irish law and the listing Rules of the Euronext Dublin, the Financial Conduct Authority and comply with Article 4 of the EU IAS Regulation.
The 2018 and 2017 Financial Statements have been audited and received unqualified audit reports.
The 2018 Financial Statements were approved by the Board of Directors on 26 February 2019.
The Consolidated Financial Statements are prepared under the historical cost convention as modified by the revaluation of property, investments held for trading, available for sale investments and investment property which are measured at fair value.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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